Hey folks - this is Michael from YC - happy to hear your thoughts on the post
In summary, I guess I disagree with the whole thing
I didn't start using AirBnB until 2013, and I used them because they were remarkably polished and made the experience super-easy. They weren't at all a "hair on fire" problem for me.
But I could imagine that at some point in time, there was a group of people who were so desperate for a place to stay that they'd crash on a couple of airbeds at a stranger's place. And that gave those strangers the idea that maybe this was something worth looking into and investing time into perfecting.
The importance of that initial core group of users may be feedback. I've had to give up startup ideas because I launch them and then there is literally nobody who cares. And then with no users, there are no guideposts as to which direction to improve the product in. It's all guesswork, and random ideas don't have a particularly high chance of success.
This may also dovetail with the known advantage that you get from solving your own problem. If it's your own problem, then you know at least one person wants it, and you can use yourself for feedback on improving the product. Then hopefully once it's good enough for you, you can find some other folks that'll find it good enough to try out, and use their feedback to evolve the product.
For a sad case in point, there's not a whole lot of research for a cure (or even a treatment) for ALS - a disease that is completely debilitating and almost always fatal. There just aren't that many patients (even though it's common enough to touch famous people like Lou Gehrig, Stephen Hawking, and Jason Becker). Meanwhile, tons of money are poured into Viagra and its competitors - not an actual lifesaving problem, but a huge market.
E.g I was happy staying in hotels. I wasn't on fire looking to stay at someone's house. I'm guessing the hosts weren't on fire either having random strangers over.
Facebook, Google, Amazon. I was very happy with the alternatives. They just did somethings better. Although Facebook is kind of dead to me. Haven't opened in months.
I do like the analogy of getting overwhelmed by customers and having scaling problems.
That said, many startups get v1 wrong. Not necessarily because their MVP is too clunky, but because they fail to frame (or graap) the correct problem in the first place. Or because their solution to that problem just isn't the right one. (As you aptly put it, founders can get hung up on their solutions and take their eyes off of problems.)
I'd love to see a followup piece about where to go from there. Let's say you're a founder, and your v1 failed to achieve fit. Your v2, perhaps, failed to achieve fit. What is a creative, but rigorous way to go back to the drawing board for v3?
I've worked for some successful startups, and I've worked for some failed startups. None of them found fit right out of the gate. The difference seems to have been that the successful founders recognized it quickly and took intellectually honest steps to do something about it. The failures either avoided that reality, or floundered while trying to adjust.
So what are some effective methods for assessing and course correcting in MVP customer development and product development? We know that "getting outside the building," to use the Lean parlance, is critical. So is effective brainstorming. But what are the best techniques for doing either?
If someone were evaluating their next opportunity to tackle, would you recommend they focus less on identifying a specific pain point (that they may know how to solve), and instead identify a large market and then search for inefficiencies (even if they have less domain expertise in it).
Obviously the intersection of the two would be better (large market with a pain point you know how to solve) but curious which you would optimize for if you had to choose.
People and their pain are very different in general, but rather similar in specific groups. Almost everyone spends almost all of their time in a bubble that excludes the pain points of most of the world. And, for someone with the skills, possibility and desire to run a startup, it's exceedingly likely that your market is oversaturated already.
Pick any demographic metric.
For age, the personal pain points of 15-30 people have an overabundance of solutions, but the pain points associated with 53 year olds or 9 year old kids have more gaps and possibly even more paying power.
For lifestyle, the pain points of single young adults are oversaturated while needs of large families (possibly excluding baby-apps) are not, again, due to the peculiarities of startup employee demographics.
For types of location, even the minor pain (inconvenience?) points of people living in highly dense urban areas have all kinds of startup solutions, while pain points specific to millions of people living in USA rural areas are pretty much ignored.
For social groups, the subcultures popular in Silicon Valley have their specific needs filled much more than the various minorities and cultures which are mostly elsewhere. Pardon me for a crude example, but for example, there is a competitive market in gay dating apps/services with a lot of solutions developed; however, the USA LGBT population is comparable in size and thus purchasing power to the Mormon population - if you're starting a new service, which market has the larger potential for you to serve a need that's not already served by existing solutions?
For technological aptitude, the needs of early adopters are obviously served by new tech, while you definitely can build solid businesses designed to serve the far more numerous people who want to avoid bleeding edge tech or even don't have the skills or desire to use industry-standard tech - if they still have the same needs, then making that tech more friendly to them or more distant from them (having you do stuff for them by that tech, instead of having them interact directly in detail) will bring you good revenue.
My recommendation is that if you're a "technical founder" - a programmer who wants to be CTO - don't look for problems to solve. Look for business partners who already have domain expertise and a problem that they can explain succinctly (so you see the value proposition), and work with them. There's a whole world of people who can see a massive problem that could make money with a good technical solution, but they don't know how to code and don't really know anyone who can code and is willing to help them.
For example, I know that Google was a hair-on-fire problem: everybody searched for things on the Internet and nobody found what they were looking for. But was Facebook? I started using Facebook in 2004, before they'd taken VC, and I honestly didn't see the point (and still kinda don't). Perhaps I just wasn't the target market (and still am not), but then, how do you recognize a hair-on-fire problem when you're not necessarily in the target market for it?
(Interestingly, LiveJournal solved a hair-on-fire problem for me about 2 years before Facebook came out: how to keep in touch with friends that I'd met over the Internet but lived thousands of miles away. And yet Facebook is apparently a whole lot more successful than LiveJournal.)
So then, an amended question: given that you do much better solving a problem that you personally have, what happens if you're a person of few desires? Someone who enjoys having a simple life and focuses intently on a few things that matter to them, but doesn't really sweat or even notice many of the things that annoy other people?
It seems like this personality type would be well-suited for entrepreneurship in general, between having a low personal burn rate and being able to focus intently on a topic, but the inability to recognize and get seriously worked up about a problem seems like a killer.
In the beginning, a market for a innovation looks like a terrible market. Few people wanted a PC in the early days. Vacuum cleaners were a hard sell when they were first introduced, and there are countless other examples. All of these markets required that the buyers be educated and they had to be convinced it was worth the effort to learn how to use the new thing.
It seems to be, saying "don't be in a market where it is hard to sell" is great in theory, but honestly I think every truly innovative product has to create their market to some extent.
Also what are your thoughts about the long term viability of this approach to building companies? As someone with a bit of a machine learning background I see this whole model as "greedy hill climbing" aka "gradient descent." That will work until we fill in all the micro-niches at the current macro fitness peak. Then these kinds of "lean startup" style fit-and-explode market opportunities will become depleted.
What would be your advice for a team that has clearly reached product-market fit, but the market is inherently small and their growth stalls out because they've put out most of the fires for people's heads in that space?
At that point it's tempting to diversify the product and start solving less dire problems for customers by adding new features, but that makes the product larger and might slow the team down.
this kind of falls into line with Reid Hoffman's famous quote:
"If you are not embarrassed by the first version of your product, you’ve launched too late."
I think these statements paint a wide brush and fail particularly for products whose main value prop is ease of use.
If your product's core value prop is UI/UX/ease of use, you cannot deliver that with a buggy half finished product. And if you cannot deliver the value you intend to provide, then you are shooting yourself in the foot, spooking users losing their trust in your ability to deliver.
Obviously each product is different, but I think specifically for this type, these methodologies should be omitted. Because the most likely case is that your customer is already solving the problem with a "brick", whether that is your competition or a home made solution that they have created. Handing them another brick will not suffice.
It pretty much implies that you're attempting to overtake existing competitors who have found product/market fit, where people have options to fill their need but do so grudgingly because of their UX quality. Doing that can be a solid business plan, but it's very, very different from the type of new-product-discovery startups that Reif Hoffman was talking about.
If the people are paying for an existing crappy product with poor UI/UX, then that illustrates a valid need and building an easier-to-use product can greatly increase the size of that market.
However, if currently people are not eager to pay for that need, then I'd wager that simply providing UI/UX/ease of use won't change that. If their need isn't sufficient to put up with the minor bother of sucky UX (at least for 10% of most needy part of the market), then that need isn't also sufficient to put up with the much larger bother of paying you adequately.
Yeah, and if you were entering/creating a new market, usually people do not understand why they need the product you are creating and thus the original analogy still does not work.
Overall I just feel the brick analogy is not great because there are no low hanging fruits anymore. If a problem is so painful, there must exist a competitor OR a home made solution.
Agree with the rest of your statements.
I would like to ask if you believe there are many markets with unserved "hair on fire" customers. Are there thousands of these problems waiting to be solved? My intuition is that there are many people with hair on fire problems, but not many of those problems generalize to products that lots of people would want. What do you think?
This rings true to me. And I've been accused of doing just this. In 2004, my "hair on fire" problem was trying to figure out how to test web apps that heavily used JavaScript (which really was a rare thing back then), so I created Selenium to solve my dev team's testing problem. Fast forward four years later to 2008, the next "hair on fire" problem to solve was that maintaining a lab of computers dedicated to Selenium testing was labor-intensive and expensive, so then I founded Sauce Labs as a way to rent out machines for testing. Sauce could only have existed because of the problems created (accidentally, I swear!) by heavy use of Selenium.
When you have a marketplace, would it require a hair is on fire problem for both supply and demand?
I work at a startup marketplace where we clearly have a good solution for a hair on fire problem at the demand side, but our supply side isn't just that interested. They sign up, but their engagement is very inconsistent to say the least.
Do they have to do something extra/different to work through your platform (e.g. different process, different service level, pay commission to you)? Is it still worth it?
Do they use it once and then stop? If so, just ask them.